Bailador Technology Investments Navigates Sticky Tech Valuations to Post Positive FY26 Return

Bailador Technology Investments (ASX: BTI) has recorded a $6.9 million net profit after tax for FY26, alongside a 2.8% post-tax portfolio return during a difficult period for Australian technology valuations.

The growth-capital investor declared a fully franked final dividend of 3.5 cents per share, equating to a 6.7% annualised cash yield and 9.5% when grossed up for franking credits based on its 12 August closing share price.

Underlying portfolio companies generated $735m of unaudited revenue in the 12 months to 30 June, with weighted revenue growth of 32%, gross margins of about 63% and recurring revenue of about 82%.

Post-tax NTA value finished at $1.61 per share, compared with $1.64 a year earlier and $1.70 before capital movements at the end of FY26.

Existing Portfolio Growth

Bailador deployed $7.6m into existing portfolio businesses during FY26, including $5m into DASH at a valuation 21% above its original entry price, $2.5m into Rosterfy and $0.1m into PropHero.

The private portfolio delivered a 6.9% gross return, with PropHero’s carrying value rising 69% during FY26, Rosterfy gaining 49.5% and Updoc contributing an $8.3m uplift including cash dividends.

Updoc’s valuation has now increased more than 120% since Bailador’s initial $20m investment in May 2024, while the business continued to deliver revenue growth and profitability.

Bailador also realised $25m through a partial sale of SiteMinder (ASX: SDR) at an average $7.21 per share, generating a 36.9% internal rate of return (IRR) and crystallising gains at 63% above the June 2025 closing price.

The fund has completed 14 full and partial cash realisations above carrying value, producing a combined 3.5-times multiple on invested capital and a 23.2% IRR.

Annual Distribution

Bailador’s dividend policy targets an annual distribution equal to 4% of pre-tax NTA, with $0.248 per share of cash dividends delivered over the past three years including the FY26 final dividend.

Its available franking credits are sufficient to support about 4.3 years of dividends at the current rate, while the policy is structured to increase yield when the share price trades at a wider discount to NTA.

The dividend reinvestment plan will operate at a 2.5% discount to the volume weighted average price over the five trading days from 18 August to 24 August, with DRP elections closing on 24 August.

Eligible Australian and New Zealand shareholders are due to receive the final dividend on 7 September, with participation in the DRP available for shares held on the 19 August record date.

AI Positioning Shapes Outlook

Bailador is focusing on portfolio characteristics it considers defensible in the AI era, as it sees markets maturing in their understanding of the sector.

“Bailador’s portfolio is extremely well positioned to benefit from AI with high degrees of proprietary data, verticalised software, regulated environments and mission critical software,” Bailador co-founder and managing partner Paul Wilson said.

“As markets become better equipped to value AI forward technology businesses, we are confident we will continue to see strong value in the Bailador portfolio.”

Across the nine businesses included in its core operating performance comparison, five were positive at the EBITDA level in FY26, and all nine increased their EBITDA margins.

Bailador’s view that private holdings remain conservatively valued is supported by 39 of 40 third-party transactions occurring at or above carrying value, with those transactions delivering an average valuation uplift of 24%.